Abstract:

Innovation activities are important for smart cities and current research suggests a mutual dependence. This paper explores the relationship and sustainability between urban (smart cities) and non-urban areas (rural space) using the Czech Community Innovation Survey of 2014. The estimation method uses the Heckman procedure to account for section bias. It follows four standard innovation stages which start with the decision to innovate and ends with commercialization in the last stage. Result of the first two stages suggests that localization of enterprises in large smart cities was not related to the probability to engage in the new-to-the-market innovation process. This suggests a presence of the networking effect which is based on ICT technologies which allow for innovation outside cities but with lesser R&D intensity. The innovation R&D intensity was related to the localization of enterprises in large smart cities. The effect was about 81 % for an average urban (Czech largest cities) located company in comparison to an »estimated default« enterprise which was located in a non-urban area, in a low-tech industry, competing in local markets, and not being part of a group of enterprises in 2014. In other words, in comparison to an average non-urban area, the effect is lower. This research explored the issue of connectedness and smart city efficiency. Further research can use more precise Smart city classification or the last step which will evaluate also the ability to capture profits from innovated goods and services